Manchester United will lose around £35m after failing to qualify for the Champions League, the club confirmed.

United confirmed the financial hit from their failure to qualify for Europe as they prepared to confirm Louis van Gaal as the club’s new manager.

Van Gaal, currently the Dutch manager, has agreed the terms of a three-year deal that will be confirmed after the weekend.

The deal will not be confirmed before Holland play Ecuador in Amsterdam on Saturday, and may not be formally announced until Monday.

The Old Trafford club saw pre-tax profits rise to £20m

Ryan Giggs is expected to work as his assistant manager having discussed the role with van Gaal in person on Wednesday.

Speaking to investors in a conference call following publication of United’s latest financial results, executive vice-chairman Ed Woodward said the club was active in the transfer market, and that the new manager will have a healthy transfer budget to overhaul the squad.

He also revealed that David Moyes will receive a pay-off of "single-digit millions" for being sacked less than a year into a six-year contract.

"The club's expectation, and you will see this in our activity in the transfer market and around the managerial position, is absolutely to get back into the Champions League," Woodward said.

David Moyes ill-fated spell as manager did not hit the club's finances

"We will be active in the transfer market, the window is open … we are looking at investing in players in the summer."

In a note to investors accompanying the results, Woodward said the club generated record revenues thanks to "impressive year over year growth".

"This puts us in a healthy financial position to continue to invest in the squad. Everyone at the club is working hard to ensure the team is back challenging for the title and trophies next season."

While overall revenues grew, wage costs rose by almost 19% in a period that saw the club negotiate a new contract with Wayne Rooney, and reflects the purchase of Juan Mata and Marouane Fellaini.

Wayne Rooney's new contract contributed to a rising wage bill

Accounts for the third quarter of the current financial year show revenue up 26% to £115.5m, resulting in a profit before tax of £20m.

Gross debt for the club has been reduced by £16m in the last quarter and now stands at £351.7m. Interest paid on loans was £5.9m.

The rise in revenue was largely driven by a 19% increase in commercial income, with sponsorship income up by more than 40% as the club continues to strike new deals around the world.

Broadcast revenue also jumped by more than 60%, reflecting the increase in the value of Premier League broadcast deals that kicked in this season.

The club expect to offset some of the Champions League losses with exhibition games, though it is unclear when these will be played.